Microsoft's AI buildout stalls on power, not chip supply

Microsoft has spent roughly $280 billion on AI infrastructure since 2022 and says it has added five gigawatts of datacentre capacity in two years, but a Guardian investigation puts the AI portion of that capacity closer to 1.2 gigawatts and finds that some sites Satya Nadella has already declared open are not yet fully running.

The clearest example is Fairwater, Microsoft's flagship Wisconsin campus. Nadella announced in April that Fairwater was "going live," but satellite imagery reviewed by the Guardian showed only part of the site operational, and by May Microsoft had told a Wisconsin newspaper that the facility was not yet online.

Nadella has been blunt in public that the constraint is no longer silicon. "If you can't do that, you may actually have a bunch of chips sitting in inventory that I can't plug in. In fact, that is my problem today. It's not a supply issue of chips. It's the fact that I don't have warm shells to plug into," he said on the All Things AI podcast.

The paper also reports Microsoft is holding fewer of Nvidia's newer Blackwell chips than analysts would expect given its status as Nvidia's largest customer, which the Guardian reads as procurement or deployment lagging behind the headline announcements. Two of the analysts we follow flagged the piece the day it landed.

Microsoft rejects the arithmetic. "Microsoft does not report on the volume of specific chips in its AI infrastructure. The estimates the Guardian has shared with us are inaccurate, drawing the wrong conclusions from incorrect assumptions," a spokesperson said.